Will American tobacco farmers be able to live up to Chinese demands?
As marketing began in the United States, flue-cured growers were optimistic that they had produced more of the style of leaf that their best foreign customer, the People’s Republic of China (PRC), prefers.

That Chinese buyers like flue-cured leaf with a lemon color is well established. But until this season, the Americans’ success in producing it has been mixed.

That’s because growing lemon leaf is not exactly a science. Agronomists say nitrogen application must be reduced and harvest moved earlier. But even then, it is a hit or miss process, and growers get little help from variety choice. For many years an orange color has been the goal in breeding, and most varieties currently in use don’t easily produce lemon leaf.

There was a bigger problem in 2007: lemon color is very difficult to produce in a dry year, and 2007 featured a record-setting drought.

There has been more rain this season, and even though the flue-cured belt has experienced periods of drought, there is reason for some optimism about the quantity of this style that will be produced.

Most Chinese purchases of US flue-cured come from the midstalk, one buyer said. “They will buy lugs and cutters, the grades that tend to cure this color more often. They buy some tips, but usually just the thinner ones.”

Another US buyer with considerable experience in the China market pointed out that the Chinese demand for light leaf was based on appearance more than flavor.

“They like a lemon color leaf because they want the tobacco in their cigarettes to show it,” he said. “They want to see light-colored flecks. There is an association of bright color with quality which may carry over from the old English style cigarettes that were smoked there for so long.”

It has been suggested that American growers might better present the lemon leaf they have if they would more diligently separate a cutter grade from their leaf. Cutters have been in very low demand for a long time, and many if not most farmers have gotten in the habit of including their cutter leaves in their leaf grades and not marketing a cutter grade at all.

Perhaps for not quite the same reasons, Chinese purchases of US burley have come from a similar part of the stalk. “The Chinese tend to buy burley from the middle of the stalk, and they don’t care much for the tips or the lower stalk,” said Brian Furnish, General Manager of the Burley Tobacco Growers Cooperative Association in Lexington, KY.

“We have had a lot of interest from China, and from the Philippines and Indonesia as well,” said Furnish. “They buy a little US burley from dealers here but most of it comes from the cooperatives.”

Charles Finch, General Manager of the Burley Stabilization Corp. in Knoxville, TN, said he had observed a lot of interest in this crop on the part of the PRC. The states he represents - Tennessee, North Carolina, and Virginia - seemed to have had better luck with the weather this season, so he was optimistic that there would be plenty of good leaf for the Chinese and other foreign customers.

Flue-cured production in China in 2008 has been estimated at 2.07 bn kg, about 6% more than the 1.95 bn kg produced in 2007 and roughly the same as in 2005 and 2006, according to Universal Leaf.

Burley production is projected at 28 mn kg, about 12% more than in 2007. This would be the first year since 2004 that burley volume in China has increased. In 2004, 45 mn kg were produced. - (Bickers)

Bulgaria
Oriental production up substantially
Sofia - Production is estimated at 21.7 mn kg, an increase of 19% over the 18.2 mn kg produced in 2007, said a report from Universal Leaf.

The 2008 Krumovgrad crop is estimated at 18.5 mn kg, up about 16% over last year. Frequent rain and moderate temperatures in the first half of June resulted in good plant adaptation.

The small East Balkan crop is estimated at 1 mn kg, a 43% increase over the 0.7 mn kg of 2007, while the smaller still Basma crop is estimated at 0.2 mn kg, the report said. - (Bickers)

India
Farmers jubilant as tobacco prices soar
New Delhi - Tobacco auctions in India reached a record high of Rs 134.40 per kg at the Jangareddi Gudem auction spot.

Growers from the northern light soils (NLS) region of West Godavari received between Rs 110 and 125 per kg, the Koyyalagudem auctions reported a price of Rs 110, and those at Gopalapuram reported Rs 100. The prices offered this season are said to be the highest in the history of the Indian tobacco auctions.

The average price for the highest quality tobacco was Rs 97.11 in the NLS region, Rs 84.23 in the Central Bright Soils (CBS) region, and Rs 81.86 in the Southern Light and Bright Soils regions. These prices are nearly double that of last season, where average prices reached Rs 47.50.

Approximately 123.95 mn kg of tobacco has been sold, with low grade tobacco reaching prices of Rs 56.57.

Some of the contributing factors to these high prices are the drastic production decrease in Zimbabwe, a reduction of nearly 80%, as well as a shortage from Brazil.

Malawi
Some good quality leaf, but some rejections
Lilongwe - About 78.1 mn kg of burley had been sold by mid June at an average price of US$2.35 per kg, according to a leaf dealer. Offerings in Lilongwe consisted mainly of medium to low quality leaf, while Limbe and Mzuzu offerings were predominantly medium to good quality lugs and cutters. The rejection rate in Limbe was very high, due to mixed bales.
- (Bickers)

Mexico
Good quality, dry season crop
Mexico City - As of June 5, receiving of the dry season burley crop was 88% complete, a leaf dealer said. Overall quality was good to excellent, but the crop size was believed to have dropped slightly by 52 metric tons. The estimate for all burley in Mexico is now 9 mn kg, roughly 10% below 2007. - (Bickers)

Pakistan
Tobacco growers warn of civil disobedience
Peshawar - The Sarhad Chamber of Agriculture, Swabi, warned that over a mn tobacco growers would start a civil disobedience movement unless the government fixed the cash crop rate.

Tobacco growers rejected the government’s rate of Rs 66 per kg and suggested on of Rs 100 per kg, calling the government’s rate exploitation in light of last year’s rate of Rs 80 per kg. The Chamber’s President, Mohammad Ali, said that if negotiations fail, an estimated 300,000 people would face unemployment.